Ratas: Estonia did better than expected in EU budget talks

Charles Michel (left), President of the European Council, and Jüri Ratas, Prime Minister of Estonia, at the discussion of the Heads of Government.
Charles Michel (left), President of the European Council, and Jüri Ratas, Prime Minister of Estonia, at the discussion of the Heads of Government. Source: Jüri Ratas/ Facebook.

Prime Minister Jüri Ratas (Center) said Estonia's share of the newly agreed European Union long-term budget exceeded expectations. The country will receive an additional €2.17 billion than it does currently.

Estonia will receive €6.8 billion from the new long-term budget for 2021-2027. In addition to the budget, Estonia will receive more than €1.5 billion in subsidies from the economic recovery plan over the next three years. This means the country will receive almost €2.17 billion more from the next European Union budget than in the current period. 

It will also be possible to apply for a loan, the government's communications office said.

For every €1 paid into the EU budget, Estonia will receive €2.8 over the next seven years. When the restart plan funding is added to this the amount increases to €3.5, the government said in a statement.

After an agreement was reached early on Tuesday morning, Ratas said the budget talks were successful for Estonia and the government could be satisfied with the result.

"We can quickly start making the large-scale investments and reforms needed to relaunch the economy. This will give our entrepreneurs confidence, but also real investments will help create jobs and revitalize the economy," he said.

Heads of state discussing the budget in Brussels. Source: Jüri Ratas/ Facebook

Ratas said the money will help implement the goals of the national strategy "Estonia 2035". From the new long-term budget, Estonia will have €3 billion euros to spend on cohesion policy. 

Ratas said it was also an important negotiating achievement for Estonia to reduce the co-financing rate from 45 percent to 30 percent compared to the initial offer. This will speed up the implementation of projects and reduce the need for state funding by approximately €1 billion, he said.

Direct payments to farmers will increase to €1.35 billion, 35 percent more than in the current period. According to the original proposal, payments per hectare would have increased from 66 percent to 76 percent of the EU average but after negotiations, this will now rise to 80 percent by 2027.

Estonia will have a total of €3.3 billion for activities with a positive environmental and climate impact.

One of the important goals achieved in the negotiations was the additional funding needed for the construction of Rail Baltic and the securing of a favorable financing rate from the EU. 

"The dream of Estonia, Latvia and Lithuania of a fast and environmentally-friendly railway connection with Europe will come true. Additional funding in the budget negotiations increased the current project by a total of €1.56 billion at current prices," said Ratas.

The new long-term budget and the recovery plan impose no new taxes. The change will be made in the calculation of own resources, which will include non-recycled plastic packaging waste in addition to the gross national income.

Last week member of the Estonian government said they were against the introduction of a plastic packaging waste tax.

It took five days for the heads of government of the European Union to reach an agreement on the long-term budget and Economic Recovery Fund for the next seven years, which totals €1.82 trillion.

The recovery fund has been created to help member states deal with the impact of the coronavirus.

The European Union's budget for the next seven years will be €1.074 trillion. In addition, there is a €750 billion recovery fund based on a joint loan from the European Union. €390 billion of this will be used in the form of grants and €360 billion as loans.

According to the proposal by the European Commission and the current estimates, Estonia's share in repaying the €750 billion loan of the EU should total around €1 billion in 2028–2058, which is about €35 million a year.


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Editor: Helen Wright

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